Mr Stokes, who owns 48.8 per cent of the listed
Seven Network
and 100 per cent of WesTrac, said the merged Seven Group Holdings’ cash flow would generate several opportunities for expansion.

“This doesn’t limit what we might do in the media space," he said on Monday. “In fact, it enhances it."

Under the proposed takeover, Seven would pay $1 billion in shares for WesTrac and take on $1 billion of debt. Mr Stokes would own 68 per cent of the merged company. Seven would use $600 million of its $1.04 billion cash pile to reduce debt at WesTrac, which holds the contracts to distribute Caterpillar equipment in Western Australia, NSW, the ACT and north-east China.

Seven director
Peter Gammel
, who is managing director of Mr Stokes’ private company Australian Capital Equity and chief executive-elect of Seven Group Holdings, said the new company’s expansion plans would be largely focused on the media industry.

Asked if Seven Group Holdings thought it could buy more Caterpillar franchises, he said it would “never say never", then said Australian Capital Equity had unsuccessfully bid for the Caterpillar franchise in Chile in 1992.

“It’s going to be hard to get more Caterpillar territories," he told The Australian Financial Review. “I think Caterpillar would look to its own family first. We’re not rushing to suddenly invest in the pharmaceutical business or something like that. Media will be a key focus."

Last year, Seven spent $264 million to lift its stake in James Packer’s Consolidated Media Holdings, which owns 25 per cent of pay TV operator Foxtel and 50 per cent of Fox Sports producer Premier Media Group, from 4.8 per cent to 22.1 per cent. After falling 38¢ to $6.98 on Monday, Seven shares climbed to $7.15 yesterday.